How a handset website operator built loyalty startup Lantern to solve its own problems

Andrew Lissimore runs an audio clothing website Headphones.com for almost a decade now. While audiophiles attach great importance to their equipment and want to try recent gadgets, Lissimore was not satisfied with continuously spending money on platforms like Meta and Google to acquire recent customers; he wanted to find a way to higher retain the customers he already had.

The founder began looking for solutions in the Shopify ecosystem that may support the business with loyalty programs. However, most of what he found only offered solutions based on spend and tiers. So he decided to build his own system.

What began as a project to solve the loyalty issue for headphones.com is now a startup called Lanternthat other corporations can use to easily integrate loyalty solutions into their own businesses.

Initially, the company combined different apps to earn different loyalty points based on badges, spends, points and referrals, but this was difficult to manage. Additionally, the combination of various applications created challenges related to user experience flow and brand identity.

“We thought it would be great to have a native Shopify loyalty system that was easy to customize and integrate,” Lissimore said. “I was able to get Shopify designers Kyle Peatt and Dominic McPhee, who built their Polaris design system, to work on it.”

The two later joined Lantern as co-founders. Peatt currently serves as director of design and product and McPhee as director of technology. In total, the company currently employs eight full-time employees.

Lantern can handle customer account creation and management, loyalty, and referrals for any vendor working on Shopify. Websites can reward returning or recent customers and give them points for activities resembling participating in forums. The company explained that sellers can easily integrate their solution and do not need to add any additional code to do so.

Lissimore said running Listens.com was a great testing ground for Lantern to understand the pain points of being a salesperson and achieving higher retention.

“I think we were in the perfect place to come up with something like Lantern because [headphones.com] they desperately wanted to increase the redemption rate. Many companies, such as clothing and beauty brands, naturally increased their buybacks, but for us this was an existential event,” he told TechCrunch.

After Listens.com adopted Lantern, the purchase rate among repeat visitors increased from 30% to 50%. The period for purchasing a second pair of headphones has also been shortened from 198 days to 98 days.

The company currently has clients resembling skincare site Counter, which does greater than $200 million a 12 months, and footwear brand Vessi. It also created tools to effectively measure retention to exhibit the value of Lantern to its customers.

To further expand its business, Lantern raised $3.1 million in seed funding led by Salesforce Ventures with participation from Sidekick Partners, Day One Ventures and individual investors resembling Vessi’s Tony Yu. The company directly competes with existing startups resembling LoyaltyLion and Yotpo.

Rob Keith, partner at Salesforce Ventures, said Lantern sets the company apart because the startup approaches worker retention through means beyond point loyalty and a flexible approach.

“Lantern brings together something unique – Andrew built and scaled Listens.com and faced retention challenges as a seller, while Kyle and Dominic come from Shopify, where they built the Polaris design system that thousands of developers use today. This combination means they understand both what sellers actually need and how to build solutions that native to the platform, not bolted on,” he said.

Keith added that Lantern’s features, resembling wallet functionality, appearing directly at checkout without any pop-ups or redirects, help each consumers and brands.

In its product roadmap, the company plans to leverage artificial intelligence and provide customers with worker retention insights and recommendations.